Home Real estateHeritage buildings A lifeline for heritage out of thin air?

A lifeline for heritage out of thin air?

A draft law that would help with preservation heritage of Beirut buildings

by Scott Preston

Each year, a new series of coffee-table books feeds Lebanon’s nostalgia with vintage photographs and cityscapes that celebrate the country’s rich architectural past. Today, the old Lebanon survives through a dwindling number of heritage buildings, now barely unrecognizable compared to the images of the city when in bygone decades. Having survived the war, the remaining structures have been left to decay, collapse, and make way for larger, modern developments amid a growing scarcity of buildable land.

Lately, a long-awaited draft law to protect heritage buildings—which had lain untouched for over a year on the government’s doorstep—is beginning to gain traction. If enacted, the new law would incentivize owners of heritage building to maintain their properties. The law targets older buildings that are indexed on the Ministry of Culture’s heritage list. In principle, this list safeguards structures with heritage value by restricting the disbursement of demolition permits, thereby prohibiting their destruction. What it does not address, and what the new law hopes to assist with, is maintaining and restoring these buildings.

Since the creation of the heritage list in 1996, its limitations have drawn the ire of a number of interest groups, none more outspoken than the owners of the historic buildings themselves. Proprietors complain that the ministry has denied them the full value of their land, as market prices are dependent on potential constructability. Built-up properties are of little interest to developers without the ability to raze them and lay new, more lucrative foundations.

But the difference between a property’s actual value and its potential value, known as the rent gap, has surged in the decades since the end of the civil war. Eager to liquidate their estates for large profits, heritage building owners have found a workaround: While the demolition of the buildings is prohibited, leaving them to collapse of natural causes is not.

“The fact was that these buildings were being destroyed, either with or without permission,” says Minister of Culture Ghattas Khoury. “Because if you have an old house on a piece of land in Beirut, and you want to build a tower, then you neglect that house, and through neglect it will fall down. This was what was being done all year, either by illegal attempts of bringing it down [or by neglect], so we made a law that will encourage the owners of these houses to preserve them.”

Something in the air

The new law would incentivize the owners of heritage buildings to save their aging properties by allowing them to sell their lot’s unconstructed space as if it were buildable area. The amount of space that can be sold, along with its market price, is primarily set by the potential constructibility of the property, which is determined in part by the zoning density of the location. This potential building size is expressed by what is known as the exploitation factor.

For example, a 1,000-square-meter plot with an exploitation factor of three would allow for the construction of a 3,000-square-meter structure. If a heritage building on the property takes up an area of 800 square meters, then the property owner would be left with 2,200 square meters of saleable area. This area, known as the property’s air rights, would be apportioned to the owner by the Ministry of Culture in the form of certificates that represent the dimensions of the unconstructed space.

These air rights could then be shifted from the initial heritage property to another location through a process known as the transfer of development rights (TDR). Developers can buy certificates from owners of heritage properties, allowing the companies to exceed the previous exploitation factor for their project by the amount of the air rights they purchased—up to 20 percent extra. At the same time, zoning regulations and development controls, such as building height limits, will remain in effect. Under the law, transfers can only be made from small heritage sites to large, empty parcels in mainly non-heritage zones.

Although the certificates are denominated in square meters, the value of the area being traded will vary from place to place. “One hundred meters in Basta are not equal to a 100 meter air right on the seafront,” explains Khoury. “Because the seafront is very expensive. So if you want to transfer 100 meters from Basta to the seafront you have to take into consideration that these 100 meters might become 25 meters.” Khoury adds that the value calculation would be appraised by a committee involving the culture, interior, public works, and finance ministries. 

When it comes to the sale of the air rights, that would be subject to the dynamics of supply and demand. Abdul-Halim Jabr, an architect and urban-design consultant who helped draft the law, says, “If I have a property, [and] I aspire to sell it at $5 million, I have a better chance of selling it in a good market—if there is a booming economy and people are building. If the entire market is in a glut, I have fewer chances of selling the property. The same applies for air rights.”

Through the transfer of development rights, heritage building owners could profit from the permanent sale of their air rights, while keeping their old homes. Furthermore, a portion of the revenues generated in the transfer would have to be invested into the maintenance and refurbishment of the heritage structure. The exact dollar figure would also likely be specified by the Ministry of Culture and would be evaluated on a case-by-case basis, depending on the repairs that are required. “If it’s just minimal, it can range between $200 per meter or $1,000 per meter. If it’s completely destroyed and you’re rebuilding it again, it’s $1,000 per meter. If it’s just, you know, façade and internal partition, it’s about $400 to $500 per meter,” says Khoury.

According to Jabr, homeowners whose buildings are not already on the heritage list will have an added incentive to register their buildings for heritage status protections. Those that voluntarily list their buildings as heritage sites, should they qualify, will be authorized to sell all of the air rights that their property is eligible for, whereas property owners whose homes are already on the list will only benefit from a maximum of 75 percent of the air rights they have available.

The 100-percent entitlement may be complicated by the addition of a fund that the Ministry of Culture has attached to the bill following its initial submission. Maintaining the fund would require that 5 percent of air-right certificates be collected from each transaction and sold at the ministry’s discretion, Khoury said. The funds would be used to revitalize heritage buildings in rural areas, where air rights may be insufficient to finance the maintenance costs due to the low-density zoning outside of the city.

Mixed reviews

Over the past 20 years, several attempts have been made to legalize TDR frameworks. Jabr said the idea was first introduced in Lebanon in 1997, when he and other part-time academics were called upon to review the Ministry of Culture’s first heritage list. He notes that the first attempt to pass a TDR law was undertaken in 2000 by then-Minister of Culture Ghassan Salame. That effort, failed along with another initiative from Minister of Culture Tarek Mitri in 2008. The latest version was submitted in July 2016, and initially looked as though it would share the fate of its predecessors. Then, in October 2017, news broke that the cabinet had suddenly negotiated approval of the law.

Now that the draft has made it past the Council of Ministers, lawmakers say that they will try to fast-track the legislation. Member of Parliament Mohammad Kabbani, head of a joint committee on public works, transport, energy, and water, said he will attempt to pass the law before elections take place in May. Khoury raised the possibility that Speaker of Parliament Nabih Berri might take the draft directly to a vote in the general assembly.

Despite this sudden sense of urgency, the TDR law may still face a number of legislative hurdles, from homeowners to politicians. In an interview with Executive, Kabbani called on the government to compensate heritage homeowners with bankers’ checks as opposed to air rights certificates. He also suggested that the government should arrange for real estate companies to purchase the air rights directly from the owner.

Many heritage activists also cautiously support the law, but have their own concerns.

For years, civil-society organizations have lobbied to reduce zoning densities and rein in building sizes to human scale, a goal that they believe could become politically impossible if property owners feel entitled to air rights. Mona Fawaz, professor of urban planning at the American University of Beirut, notes that owning land does not automatically confer the right to develop it and that the government has the legal authority to reduce exploitation factors without compensation.

Fawaz clarifies that she is not opposed to the entirety of the draft, but  says that “[TDR] tends to be the main point of contention for everybody, because this is where, the advocates of this law say it wouldn’t have passed if it wasn’t for this, and those who are saying this is risky businesses are saying what you’ve just passed is likely to create a precedent, which is 10 times worse than not protecting heritage.”

“I agree,” says Jabr, citing these critiques, “but I tell them, look, I’ve been struggling for 20 years. I’m limited. This is the most I, or we, came up with. If you can come up with anything better that can bridge the divide, I’ll be your first supporter. But nobody has gone through the trouble of balancing the act and trying to make sense of black and white [and turn it] into some kind of middle grey the way we did.”

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